Technical analysis
Technical analysisThe study of price and volume history to judge probable future price behaviour.
In plain terms
Reading the crowd through the record it leaves on a chart.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Discounting
Technical analysisThe first assumption of technical analysis — that every known fact, forecast and emotion is already expressed in the price.
In plain terms
You do not need to know why a large fund is accumulating. The accumulation shows up as rising price on rising volume whether or not the reason is public.
Efficient market
Technical analysisThe claim that prices already reflect available information, so no repeatable pattern in past prices can be exploited.
In plain terms
The strongest objection to technical analysis, and it holds in part: simple published systems do decay once everyone can see them. What does not get arbitraged away is the discipline to follow a rule consistently.